Despite a $2.4bn loan obtained by Nigeria in 2018, the World Bank has said it is in talks with Nigeria for a fresh loan of $2.5bn.
Revealing this to Bloomberg on Wednesday, Vice-President for the African division of the World Bank, Hafez Ghanem, said: “we’re talking about a new set of programs of about the same amount, it should be around $2.5bn.”
President Muhammadu Buhari’s government has increased its borrowing to finance government spending, with domestic debt at $55.6bn and foreign loans at $25.6bn.
The country is also faced with revenue shortfalls as the output and price of oil, Nigeria’s main export, fell in the past five years.
Nigeria has been seeking credit with low interest, long repayment periods from institutions to ease its burden, including the World Bank and the African Development Bank.
“The current economic performance of Nigeria is not enough to reduce poverty, we need to accelerate growth”, Ghanem said.
“It’s important to resolve the problems of the power sector in Nigeria to bring in more investments, because you need to bring down the cost of power to make the economy more competitive for the development of industries.”
“The World Bank is supporting digital transformation in Nigeria because of its potential ability to transform other areas of the economy including industry, agriculture and services, Ghanem noted.
“Nigeria has a comparative advantage in that area because of the youth, a majority of the population is young,” he said. “So if we want to create jobs, we need to invest much more in the digital economy”, he added
The World Bank provides low-interest loans, interest-free credit, and grants. It focuses on improving education, health, and infrastructure. It also uses funds to modernize a country’s financial sector, agriculture, and natural resources management.